ST. PAUL – The Minnesota House approved an omnibus bill Wednesday highlighted by legislation to rectify a tax issue that has placed a major burden on many farmers and business owners, along with a $1.37 billion bonding package.
Minnesota’s lack of full compliance with federal Section 179 depreciation has had drastic tax implications in recent years, treating like-kind exchanges as income and resulting in massive state tax bills for farmers and businesses purchasing capital equipment.
State Rep. Paul Anderson, R-Starbuck, said constituents have contacted him after receiving bills from the state saying they owe thousands of dollars in additional income tax – including some in the six-figure range.
“It is going to be a big relief for farmers and businesses that purchase capital equipment to see we fixed the Section 179 tax problem,” Anderson said. “I have been working for over a year to resolve this issue because people were receiving unexpected tax bills from the state in the thousands of dollars. It was breaking budgets and we needed to fix that problem. It’s just the right thing to do and it is good to see this bill finally pass the House.”
A $1.37 billion capital investment package to fund projects throughout the state also was included in the bill. It features $3.5 million for Melrose to expand its wastewater treatment plant to accommodate increased business activity in that city, as well as $5 million for expansion of the Pope-Douglas Solid Waste Management campus Alexandria.
“Those are both worthy projects that will have positive impacts in our area,” Anderson said. “I’m pleased they were included in the bonding package.”
The House approved the bill (H.F. 1) and adjourned from a fifth special session of the current interim late Wednesday evening. Anderson said the Senate is expected to act on the package Thursday and, upon approval, send it to the governor for enactment.
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